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Looks as if markets are waiting for something to happen. That something could be the key risk event ahead in the form of U.S. retail sales data, due at 12:30 GMT, one hour earlier than usual as the U.S. shifted to daylight savings time this past weekend. This indicator is a market mover by definition, and this time could be no exception, as expectations are high for a figure in the upper +0.5% range, when previous numbers came in at a tiny +0.1%.

Prior to this, some second-tier EU data will also be released, including French jobs and CPI figures, coupled with Spanish CPI, and more importantly, EU industrial production, at 10:00 GMT.

Tuesday's good results in short-term Spanish sovereign debt auction helped propelled EUR/USD above $1.3050, just to reverse course at fresh weekly highs of $1.3070 moments before the NY opening bell (heading back to the $1.3014 area), the lowest ever since.

According to Boris Schlossberg, co-founder at BK Asset Management:

Earlier in the session, the EUR/USD rose to a high of $1.3073 on the back of strong buying in the EUR/GBP cross which hit a high of $0.8777 before meeting stiff resistance and dropping back to $0.8740 by the end of European equity trading...

"It appears that EU policymakers are coming to the conclusion that further austerity measures in the periphery economy may be counterproductive. And, if this tilt towards the "relaxation of austerity" takes hold, the EUR/USD may find a stronger bid on the assumption that the EZ economy will finally begin to recover," he added.

On the other hand, Valeria Bednarik, Chief Analyst at Fxstreet.com, believes that risks in the EUR/USD are still skewed to the downside, although noting that "the pair has to first clear the $1.2980 area to extend its low up to $1.2950."

"Below this last is stopping the build up. So o if triggered, there is scope for a test of $1.2880 area. Above $1.3070, the upside can extend up to $1.3100/10 area, where a daily descendant trend line should halt the advance," Valeria concludes.

Source: EUR/USD Eyes U.S. Retail Sales